Amid a tightening venture capital environment, Slync.io secured an $11 million Series A funding round this week, driven in part by major forwarders finding different ways to leverage the software startup’s ability to automate parts of their networks.
San Francisco-based Slync, founded in 2017, focuses primarily on automating core logistics processes, including pulling together data from internal systems and external data sources, to enable users to manage their identified pain points. The software is designed to be pliable enough to solve a range of logistics operational issues, CEO and founder Chris Kirchner said in an interview with JOC.com.
That includes uses such as connecting a global network of contract logistics warehouses, end-to-end tracking of a shipment across multiple modes of transportation, and order-to-delivery management. Attracting large forwarder customers such as Kuehne + Nagel, DHL, and Expeditors International has allowed Slync to land its funding round despite venture capital firms becoming more conservative as they wrestle with the economic fallout of the coronavirus disease 2019 (COVID-19).
A use of Slync’s software that’s been common early in the company’s evolution is enabling forwarders to manage disruptions across all the different sources of information they receive and the communication channels they and their customers use. The software enables Slync customers to have access to critical information on any device anywhere in the world, a capability Kirchner said has risen in prominence as logistics professionals deal with the challenges COVID-19 presents.
“Slync.io has a powerful and exciting product,” Markus Johannsen, senior vice president of global seafreight at Kuehne + Nagel, said in a statement to JOC.com. “I was happy to partner early with Chris and the Slync team and I am very happy with our results so far.”
Automation needs vary
Kirchner said Slync is built around three types of automation: event trigger-based, user input, and time-based. In event-based situations, Slync receives information from a customer’s system, such as a transportation management system (TMS), a warehouse management system (WMS), or enterprise resource planning (ERP) system. It can also create exceptions based on an email subject or body text. If the data from those sources doesn’t match the logic established in Slync, it automatically notes a variance from expectation.
In user input situations, a person notes the issue and the system captures that and automates the exception elsewhere in the system. That cuts significant time and associated costs from managing those exceptions through email chains and so-called “tally spreadsheets,” Excel documents logistics companies use to manually aggregate exceptions, Kirchner said.
Time-based automation relates to a process that doesn’t take place within a certain predefined period, such as a container not being scheduled to move out of a container freight station within a certain service-level agreement (SLA).
“We target highly repeatable processes with workflow automation,” Kirchner said. “Our key differentiation is combining the process automation with data from many systems. Our object model allows us to treat shipments, purchase orders, and SKUs as first class citizens in the same system.”
Kirchner refers to Slync’s system as an “operating platform for logistics.”
“Physically packing and unpacking a container, you can’t change that,” he said. “But then there’s the paperwork part and the sharing of information that takes hours … that we can remove and save our customers a lot of money.”
Focus on per user pricing
Slync’s pricing model is subscription-based, priced per number of users rather than per shipment. “We don’t want to penalize our customer’s success, and we want more data, so the last thing we’d want to do is demotivate them from providing that,” Kirchner said. “A lot of software vendors are double-dipping — charging a ‘platform’ fee plus a variable fee for usage.”
Kirchner said his company has evolved to become a process automation provider, as he realized that was a glaring need in the logistics industry, whether for provider, shipper, or carrier. There have been other young entrants in the logistics robotic process automation (RPA) space in recent years, notably RPA Labs, headed by former Catapult founder Matt Motsick, and Shipamax, which helps forwarders extract and structure information from their systems.
Kirchner said Slync has a more expansive view of the role RPA can play. “For back-office accounting tasks or repetitive form filling, RPA can be a standalone product,” he said. “In logistics, it has to be a feature of something bigger to deliver significant value.”
The company counts among its advisors John Urban, the former founder of GT Nexus, now Infor Nexus.
Slync’s $11 million Series A round was led by San Francisco-based venture capital firm Blumberg Capital, with participation from Correlation Ventures and 235 Capital Partners.
“Slync.io is extraordinarily well-positioned with multiple customer wins from global blue chip logistics players and shippers that have traditionally built their own software systems,” David Blumberg, founder and managing partner at Blumberg Capital, said in a statement. “This indicates a tipping point in the industry where it’s becoming clear to many they must move from proprietary, legacy systems to API-driven modern AI-powered systems.”
The round is a sign that despite venture capital opportunities drying up as the global economy is gripped by the effects of COVID-19, some startups are still closing funding rounds. Most VC firms are focusing on existing portfolio companies and bracing for the challenges ahead in this time of significant uncertainty, according to a range of startup CEOs who spoke with JOC.com on background.